WPG Resources provides update on JV with Evergreen Energy

WPG Resources (ASX: WPG) has been working with joint venture partner Evergreen Energy (NYSE Arca: EEE) over the past 10 days to try and resolve issues that may affect Evergreen’s ability to deliver an effective licence to joint venture vehicle Southern Coal Holdings to use the K-Fuel® clean coal upgrading technology.

WPG has been undertaking further due diligence on the K-Fuel® technology prior to completion under the share subscription agreement announced in June.

The company said completion under the subscription agreement is not likely to occur until the issues have been resolved.

However, WPG said it is ready to consider ways it may be able to assist Evergreen with a solution.

In the meantime, Southern Coal remains under the full ownership of WPG pending a satisfactory outcome of further discussions.

Southern Coal holds WPG’s Penrhyn and other coal assets in South Australia. Penrhyn is a very large coal deposit that lies adjacent to the underutilised Central Australian railway line – the same line that will be used for iron ore exports from Peculiar Knob.

Penrhyn also has enormous exploration upside, and with little risk that the exploration potential will be realised if a further drilling program is carried out.

A Scoping Study/Prefeasibility Study is underway at Penrhyn for the development of a 15 million tonne per annum run-of-mine coal operation for a mine life of more than 30 years.


WPG/Evergreen JV

On 10 June 2011, WPG announced it had signed an agreement with Evergreen to set up a joint venture to develop and produce Evergreen’s K-Fuel® technology throughout Australia.

WPG’s subsidiary, Southern Coal Holdings, holds all of WPG’s coal assets in South Australia and will be used as the joint venture vehicle.

Southern Coal Holdings will be 50% owned by WPG and 50% by Evergreen on completion of the deal.

Importantly, the K-Fuel® process should not only achieve a significant increase in calorific value, but also a reduction in greenhouse gasses from WPG's considerable coal resources.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/23216/wpg-resources-provides-update-on-jv-with-evergreen-energy--23216.html